The baseline freight traffic forecast assumes the relatively swift recovery of the Russian economy from the economic crisis and is based on a 4 percent annual transport growth during 2011-2015 and 6 percent annual growth in 2016-2020. The upside potential may be reached with higher than conservatively expected Russian GDP growth, as well as higher service level in the Poland-Belarus-Russia transport corridor (e.g., Lautso 2007). For future domestic freight volume, 2009 estimates are based on MoTC figures for road and the authors' own for rail. While in 2009 domestic road transport volume growth only slowed, the assumption is a 10 percent drop in rail freight volumes, due to the economic crisis. In 2010 for both road and rail, a 2 percent recovery is projected. Long-term forecasts are given separately for road and rail (the majority of Belarus freight turnover) freight transport volumes in the domestic, export, import, and transit categories. In the forecasts, no significant changes in modal split are assumed, although, for example, the use of road transport will grow more rapidly for imports. Also no major changes in international trade patterns of Belarus are projected to 2020 (see Annex 2).
According to estimates based on data from other countries around the Baltic Sea, 50 to 60 percent of road-based transit volumes (measured per ton) to and from Northwestern Russia go through Belarus. Due to the already high market share, a rapid increase of volumes, at least in the short term, is less likely than a possible decrease. Shift of transit volumes to alternative routes due to low service level are not impossible, as for example in Finland where a 16 day long strike in March 2010 caused immediate shift of some of the Russia-bound shipments from Finnish ports directly to e.g Russian ports (St. Petersburg). Finnish logistics and port operators fear that to some degree this shift may have been permanent
For rail transit, the reports’ estimates demonstrate more moderate dynamics, due to the nature of products transported. The products are less sensitive to friction in border crossings and less prone to move elsewhere. The baseline assumes a 20 percent decrease in 2009, no growth in 2010, 4 percent annual growth during 2011-2015, and 6 percent annual growth in 2016-2020. Both upside and downside depend on the performance of the Russian and EU economies.
State of the Market for Transport Services
The market for transport services, as well as for advanced logistics services, is not highly developed in Belarusdue to constraints in both supply and demand. More domestic demand for logistics services, or alternatively FDI by global logistics companies, would most probably enhance the development of logistics services in Belarus. This in turn would be crucial for offering high-quality logistics services to foreign manufacturing and trade companies and enable the expansion of the Belarusian role as a transit country beyond the traffic to Russia which now accounts for the vast majority of transit traffic through Belarus.
The supply of scheduled international and domestic groupage (consolidated LTL) cargo services is scarce in Belarus. Large manufacturing and trade companies have mostly in-house domestic truck fleets, while full truck load (FTL) to foreign destinations are usually outsourced. According to industry representatives, the demand for less-than truck load (LTL) services is low.
Because of the very high share of in-house logistics by manufacturers, trading firms and other shippers, the demand for logistics services bought from the market is still modest. According to official statistics, in 2000-2008 only 23 to 25 percent of road freight transport was bought from the market, whereas shippers produced most road transport services in-house. In most EU countries, the share of in-house road freight is typically less than 20 percent. As a consequence, in Belarus the structure, capacity, and quality of logistics service provision as a commercial activity is still at an early stage of development. This applies to the more developed forms of logistics service provision, in particular contract logistics and/or third-party logistics services.
3. Transport Sector Strategies and Freight Transport Forecast
Several existing initiatives aim at accelerating Belarus’ regional integration with other CIS countries, such as the Customs Union with Russia and Kazakhstan, and the Eurasian Economic Community (EurAsEC). REF _Ref264022194 \h \* MERGEFORMAT Founded in 2000, EurAsEC perceives integration and coordination of its members’ transport systems as one of its top priorities, as anchored in the charter. In particular, the organization strives to: (i) harmonize national transport legislation (the respective set of documents was adopted in 2003); (ii) develop EurAsEC transport corridors; (iii) remove non-physical barriers; and (iv)weave the transport policy into the development of the Belarus-Kazakhstan-Russia Customs Union, which will be fully operational by 2011.
Main Sector Objectives, Programs and Plans
Belarus does have the equivalent of a National Transport Strategy and Action Plan. The Program for Ensuring Efficient Use of Transit Potential of the Republic of Belarus for 2006 – 2010, the draft Program of the Development of Transit Potential of the Republic of Belarus for 2011 – 2015, and the Roads of Belarus Program constitute the 3 key pillars of such a national transport strategy. In addition, the Strategy for the Development of Transit Potential of the Republic of Belarus for 2011 – 2015 and the Concept of Belarus’ Transport System Development until 2025 have been recently approved by the Government. The Concept defines the goal, priorities, tasks, key focuses and parameters of Belarus’ transport system development until 2025 including mitigation of impacts generated by СО and СН2 emissions. Finally, he Government’s Program of Social and Economic Development (2006-2010) presently guides the development of the transport sector and aims at the “formation of a competitive transport system, further development of transport services, and associated infrastructure”. Even though the Government of Belarus has established the key elements of a transport sector strategy, the detailed analytical work on which such strategy must be based is not available. The World Bank believes that a combined and consolidated Transport Sector Strategy for Belarus, based on comprehensive analytical work, would be beneficial. The development of such a comprehensive approach for a Transport Strategy and Action Plan covering all transport modes is key to better reflect the linkages that exist between different policy areas and to enhance coordination between different agencies involved in the transport sector.
The Government’s Program of Social and Economic Development (2006-2010) presently guides the development of the transport sector. According to the Program, the transport policy of Belarus is aimed at the “formation of a competitive transport system, further development of transport services, and associated infrastructure.” Actions include (i) improving the legal framework of the sector, (ii) developing safety and environmental standards, (iii) considering the social aspects of access to transport services, (iv) improving the management of the sector, (v) increasing competition in passenger and freight markets, (vi) attracting investments, and (vii) increasing the export of transport services and creating favorable conditions for carrying out international transportation. An array of state programs is designed to achieve these steps.
The Government’s program for the railway sector identifies a broad range of planned improvements. These include the technical upgrading of infrastructure, improvement of safety and quality of transportation services, development of modern information technologies, enhancement of Belarusian Railways’ competitiveness in domestic and foreign markets for transport services, and integration of the Belarusian Railways into the international transport system. The Development Plan of Belarusian Railways until 2010 includes (i) development and improvement of infrastructure; (ii) renewal and rehabilitation of rolling stock; and (iii) creation of an appropriate environment for transit transportation of passengers and cargo. The implementation of these railway transport subsector priorities requires concrete actions for the development and improvement of the core railway network, mainly the Trans-European Railway corridors II and IX crossing the country (see Figure ), and the introduction of efficient technologies in the railway sector. Additionally, planned actions include parallel programming with Government innovation policy to enhance the competitiveness of Belarusian railways, the development of a new investment mechanism, and a new depreciation policy.
The Roads of Belarus Program REF _Ref264022194 \h \* MERGEFORMAT defines the Government’s plans for the strategic development of the road sector. Program activities aim to (i) increase the length of the motorway network; (ii) improve the road traffic operating conditions; (iii) upgrade the capacity of the most heavily used road sections; (iv) improve road traffic safety; and (v) attract private investment. The program includes a list of priority investments with some indicative cost estimates. The priority investments have been revised yearly based on the available fiscal envelope of the country. The main task within the Roads of Belarus Program is to upgrade the sections of the two international transport corridors (corridor II and corridor IX) passing through its territory. As presented earlier, these corridors are important West-East and North-South transit routes and the upgrading will increase their load-carrying capacity to the EU norm of 11.5 tons per single axle (see Figure ). In 2009, the program was reviewed jointly by MOTC and MOF in order to prioritize the proposed major program investments, which are: (i) the upgrade of a section of the M5 road between Minsk and Gomel (74 km in total), (ii) the upgrade of M4 road from Minsk to Mogilev (97 km in total), and (iii) the construction of a bypass around Minsk (85 km in total).
Figure . Five Main Roads and Three Axes in Belarus 2009
At present, Belavtodor undertakes little multi-year works planning, and there is no up-to-date Road Asset Management System (RMS). An inventory of the technical characteristics and condition of the road network, and of the level of traffic on each road, is a requirement to perform a multi-year road sector maintenance and development plan, including annual data collection to maintain the inventory and update the strategic plan.